Bills of Exchange Act
GOVERNMENT GAZETTE EXTRAORDINARY, 15m MAY, 1964 9
No. 34, 1964.]
ACT To consolidate and amend the laws relating to bills or exchange,
cheques and promissory notes.
(Afrikaans text signed by the State President.) (Assented to lith May, 1964.)
BE IT ENACfED by the State President, the Senate and the House of Assembly of the Republic of South Africa,
as follows:-
DEFINITIONS.
1. In this Act, unless the context otherwise indicates- Definitions.
(i) "acceptance" means an acceptance completed by delivery or notification; (i)
(ii) "action" includes a counter claim and a plea of set- off; (ii)
(iii) "banker" includes a body of persons, whether in- corporated or not, who carry on the business of banking; (iii)
(iv) "bearer" means the person in possession of a bill which is payable to bearer; (xii)
. (v) "bill" means a bill of exchange as defined in section two; (xv)
(vi) "cheque" means a bill drawn on a banker payable on demand; (xi)
(vii) "delivery" means actual or constructive transfer of possession from one person to another; (vi)
(viii} "holder" means the payee or indorsee of a bill who is in possession of it, or the bearer thereof; (v)
(ix) "indorsement" means an indorsement completed by delivery; (iv}
(x} "issue" means the first delivery of a bill, complete in form, to a person wlio takes it as a holder; (xiii}
(XI) "non-business day" means a day contemplated in section four of the Public Holidays Act, 1952 (Act No.5 of 1952); (vii)
(xii} "note", used as a noun, means a promissory note as defined in section eighty-seven; (ix}
(xiii} "note", used as a verb, means make a notarial minute, in the usual manner, of the circumstances of dishonour of a bill, within the time prescribed by sub-section (3} of section forty-nine, and includes present for acceptance or payment by a notary; (viii}
(xiv} "payment in due course" means payment made at or after the maturity of a bill to the holder thereof in good faith and, if his title to the bill is defective, without notice thereof; (x)
(xv} "value" means valuable consideration within the meaning of section twenty-five. (xiv)
CHAPTER I.
BILLS OF EXCHANGE-FORM AND INTERPRETATION.
2. (1) A bill of exchange is an unconditional order in writing, Definition of addressed by one person to another, signed by the person and require: giving it, requiring the person to whom it is addressed to pay ments for bill of on demand, or at a fixed or determinable future time, a sum exchange. certain in money to a specified person or his order, or to bearer.
Please note that most Acts are published in English and another South African official language. Currently we only have capacity to publish the English versions. This means that this document will only contain even numbered pages as the other
language is printed on uneven numbered pages.
GOVERNMENT GAZETIE EXTRAORDINARY, 15m MAY, 1964 II
(2) An instrument which does not comply with the require- ments specified in sub-section (I) or which orders any act to be done in addition to the payment of money, is not a bill.
(3) An order to pay out of a particular fund is not uncon- ditional within the meaning of sub-section (I) but an un- qualified order to pay coupled with-
(a) an indication of a particular fund out of which the drawee is to reimburse himself, or of a particular account to be debited with the amount;
(b) a statement of the transaction which gives rise to the bill;
(c) a statement on the bill that it is drawn against specified documents attached thereto for delivery on accep- tance or on payment of the bill, as the case may be; or
(d) a statement on the bill that it is drawn under or against a specified letter of credit or other similar authority,
is unconditional within the meaning of the said sub-section.
( 4) A bill is not invalid by reason-
( a) that it is not dated; (b) that it does not specify the value given, or that any
value has been given therefor; (c) that it does not specify where it is drawn or where
it is payable.
3. {l) A bill may be drawn payable to the drawer or his Effe~t if different order, or it may be drawn payable to the drawee or his order. Pbartillies toha
are t e Same
(2) If in a b!Jl, d~a~~ and drawee are the same . pers~m, r'tf'~clo~ drawee or the drawee IS a fiCtitious person, or a person not haVIng person or not capacity to contract, the holder may treat the instrument having capacity to at his option, either as a bill or as a note_ ' contract.
4. (l) The drawee must be named or otherwise indicated ~e~uirements as with reasonable certainty in a bill. 0 rawee.
(2) A bill may be addressed to two or more drawees, whether they are partners or not, but an order addressed to two or more drawees in the alternative, or to two or more drawees in suc- cession, is not a bill of exchange.
5. (!) If a bill is not payable to bearer, the payee must be Requirements as named or otherwise indicated with reasonable certainty therein. to payee.
(2) A bill may be drawn payable-
(a) to two or more payees jointly; (b) to one of two, or one or some of several, payees, in the
alternative; or (c) to the holder of an office.
(3) If the payee is a fictitious person, or a person not having capacity to contract, the bill may be treated as payable to bearer.
6. {!) A bill must be payable either to bearer or to order to N~otiability of be negotiable. , b ·
(2) A bill is payable to bearer if it is expressed to be so payable, or if the only or last indorsement on it is an indorsement in blank.
(3) A bill is payable to order if it is expressed to be so payable, or if it is expressed to be payable to a particular person and does not contain words prohibiting transfer or indicating an intention that it should not be transferable.
( 4) If a bill, either originally or by indorsement, is expressed to be payable to the order of a specified person and not to him or his order, it is nevertheless payable to him or his order at his option.
(5) If a bill contains words prohibiting transfer, or indicating an intention that it should not be transferable, it is valid as between the parties to the bill, but is not negotiable.
GOVERNMENT GAZETTE EXTRAORDINARY, ISm MAY, 1964 13
7. (I) The sum payable by a bill is a sum certain in money Sum payable. within the meaning of this Act although it is required to be paid-
( a) with interest; (b) by stated instalments; (c) by stated instalments, and upon default in payment of
any instalment the whole becomes due by virtue of a provision to that effect in the bill; or
(d) according to a rate of exchange indicated, or to be ascertained as directed, by the bill.
(2) If the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable.
(3) If a bill is expressed to be payable With interest, interest runs, unless the instrument otherwise provides, from the date of the bill or, if it is undated, from the date of issue thereof.
8. (I) A bill is payable on demimd--,- When bill is ( ) if . . d b bl d . d . h payable on a It IS expresse to e paya e on eman , or at s1g t, demand.
or on presentation; or (b) if no time for payment is expressed therein.
(2) If a bill is accepted or indorsed when it is overdue, it shall, as regards the acceptor who so accepts or any indorser who so indorses it, be deemed to be a bill payable on demand.
9. (I) A bill is payable at a determinable future time within When a future the meaning of this Act, if it is expressed to be payable- Iii!>• 'b's
1 deter-
m.ma e. (a)· at the expiration of a fixed period after date or sight;
or (b) on, or at the expiration of a fixed period after, the
occurrence of a specified event which is certain to happen, though the time of happening may be un- certain.
(2) An instrument expressed to be payable on, or after the occurrence of, a specified event which may or may not happen, is not a bill, and the happening of the event does not cure the defect.
10. If a bill expressed to be payable at the expiration of a Om~ion of fixed period after date, is issued undated, or if the acceptance date bl b'Vt d t of a bill, payable at the expiration of a fixed period after sight, paya • a er a e. is undated, any holder may insert therein the true date of issue or acceptance, and the bill shall be payable accordingly: Provided that-
( a) if the holder in good faith and by mistake inserts a wrong date; or
(b) if a wrong date is inserted and the bill subsequently comes into the hands of a holder in due course,
the bill shall not be avoided thereby, but shall operate and be payable as if the date so inserted had been the true date.
11. (I) If a bill, or the acceptance of or any indorsement on a Presumption as bill is dated the date shall unless the contrary be proved be to correctness of
' ' ' ' date and ~eemed to be the t.rue date. of the drawing, acceptance or antedating and mdorsement of the bJ!l, as the case may be. post-dating,
(2) A bill is not invalid by reason only that it is antedated and dat~ of a or,post-dated, or that it bears the date of a non-business day. non-busmess day.
12. If a bill is not payable on demand, the day on which it o (2) If by the terms of a qualified acceptance, presentment sentment for
for payment is required, the acceptor, in the absence of an payment, pr?- express stipulation to that effect, is not discharged by an 01nis- t~t and not1ce of sion to present the bill for payment on the day that it matures. ~~;~~~~~:!don
(3) It is not necessary. in order to render the acceptor of a payment ofbill. bill liable, to protest such bill or to give notice of dishonour to · such acceptor.
(4) When a holder of a bill presents it for payment, he shall exhibit the bill to the person from whom he demands payment, and when a bill is paid, the holder shall forthwith deliver it up to the party paying it.
LIABILITIES OF PARTIES.
51. A bill, of itself, does not operate as an assignment of Liabilif·· ~i- ~-awee. funds in the hands of the drawee and available for the payment thereof, and the drawee of a bill who does not accept as required by this Act, is not liable on the instrument.
52. The acceptor of a bill, by accepting it- Liability of acceptor. ,
(a) engages that he will pay it according to the tenor of his i acceptance;
GOVERNMENT GAZETTE EXTRAORDINARY, ISm MAY, 1964 35
(b) is precluded from denying to a holder in due course-
(i) the existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the bill;
(ii) in the case of a bill payable to drawers order, the then capacity of the drawer to indorse, but not the genuineness or the validity of his indorse· ment; ·
(iii) in the case of a bill payable to the order of a third person, the existence of the payee and his
· · then capacity to indorse, but not the genuineness or the validity of his indorsement.
53. (1) The drawer of a bill by drawing it- Liability of· drawer and of ·
(a) engages that, on due presentment, it shall be accepted indorser. and paid according to its tenor, and that if it is dis- honoured he will compensate the holder, or an indor- ser who is compelled to pay it, provided the requisite proceedings on dishonour are duly taken;
(b) is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse.
(2) The indorser of a bill by indorsing it- (a) engages that, on due presentment, it shall be accepted
and paid according to its tenor, and that if it be dishonoured he will compensate the holder, or a subsequent indorser who is compelled to pay it, provided the requisite proceedings on dishonour are duly taken;
(b) is precluded from denying to a holder in due course the genuineness and regularity in all respects of the drawer's signature and all previous indorsements;
(c) is precluded from denying to his immediate or a sub. sequent indorsee that the bill was at the time of his indorsement a valid and subsisting bill, and that he had then a good title thereto.
54. If a person signs a bill otherwise than as drawer or accep- Liability-· ~or, he thereby incurs the liabilities of an indorser to a holder t,1Jtger signing a ID due course.
55. (I) Subject to the provisions of sub.sections (2) and (3), Damages re- if a bill is dishonoured, the holder may recover from any party cove.rable from liable on .the bill, and the drawer, if he has been ~mpelled to ~fs~~C:~~d bin. pay the btU, may recover from the acceptor, and an mdorser who has been compelled to pay the bill, may recover from the acceptor, . the drawer or a prior indorser as damages, which shall be deemed to be liquidated-
(i) the amount of the bill;
(ii) interest thereon from the time of presentment for payment if the bill is payable on demand, or from the maturity of the bill in any other case;
(iii) the expenses of noting, and if protest is necessary and has been extended, the expenses of the protest.
(2) In the case of a bill which has been dishonoured abroad, in lieu of the damages stipulated in sub-section (l), the holder may recover from the drawer or an.indorser, and the drawer, if he has been compelled to pay. the bill, and an indorser who bas been compelled to pay the bill, may recover from any party liable to him, as damages, which shall be deemed to be liquidated, the amount of the . re-exchange and, subject to the provisions of sub-section· (3), interest thereon ·until the time of payment.
(3) If in terms of the provisions of tlus Act interest may be recovered as damages, such damages, if justice requires it, may be withheld wholly or in part, and if a bill is expressed to be payable with interest at a given rate, may or may not be awarded at the same rate as the rate so given.
GOVERNMENT GAZETTE EXTRAORDINARY, ISTH MAY, 1964 37
56. (1) If the holder of a bill payable to bearer negotiates Liability of such bill by_ delivery without indorsing it, he is called a trans- ::J:!~~r ~Y feror by delivery. ·
(2) A transferor by delivery is not liable on the instrument in question.
(3) A transferor by delivery who negotiates a bill thereby warrants to his immediate transferee, if the latter is a holder for value, that the bill is what it purports to be, that he bas a right to transfer it, and that, at the time of transfer, he is not aware of any fact which renders it valueless.
DISCHARGE OF BILL,
57. (1) A bill is discharged by pa:Yment in due course or Discharg~ by is discharged proportionally by payment of part of the amount ~~~:nt m due for which the bill is drawn, noted by indorsement on the bill, · if such payment be made by or on behalf of the drawee or acceptor.
(2) Subject to the provisions of sub-sections (3), (4) and (5), a bill is not discharged if it is paid by the drawer or an indorser.
(3) If a bill payable to a third party or the order of the latter, is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not re-issue the bill
(4) If a bill is paid by an indorser, or if a bill payable to drawer's order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor and antecedent parties, and he may, if he thinks fit, strike out his own and subsequent indorsements, and again negotiate the bill. .
(5) If an accommodation bill is paid in due course by the party accommodated, the bill is discharged.
58. If a bill payable to order on demand is drawn on a Banker paying banker, and the banker pays the bill in good faith and in the dehmran~ ddraft
d. fb · · · · b h b k w e em orse· or mary course ? usmess, 1t 1s not meum ent on t e an er to ment is forged. show that the mdorsernent of the payee or any subsequent · indorsement was made by or under the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority: Provided such indorsement does not purport to be that of a person who is a customer of the banker at the branch on which the said bill is drawn.
59. If the acceptor of a bill is or becomes the holder of it Discharge by . at or after its maturity in his own right the bill is discharged acceptor becommg • • · bolder. ·
60. (1) Subject to the provisions of sub-section (4), if the D~charge by holder of a bill at or after its maturity absolutely and un- wa,ver. conditionally renounces his rights against the acceptor in the manner contemplated in sub-section (2), the bill is discharged.
(2) The renunciation of rights contemplated in sub-section (1) must be in writing on the bill, unless the bill is delivered up to the acceptor. .
(3) Subject to the provisions of sub-section (4), the liabilities of any party to a bill may in the manner contemplated in sub- sections (1) and (2) be waived by the holder before, at, or after its maturity.
(4) Nothing in this section contained shall affect the rights of a holder in due course who had no notice of the renun- ciation or waiver.
61. (1) If a bill is intentionally cancelled by the holder or Discharg_e by h!s agent, and the cancellation is apparent thereon, the bill is ;t1~~~~tl3i~cb~rgc d1scharged. of party by
( ( 1. bl · · d h cancellation of his 2) a) Any party ta e on a btll may be dtscharge by t e signature intentional cancellation of his signature by the holder ' · or his agent. ·
(b) If a signature is so cancelled any indorser who would have had a right of recourse against the party w)lose signature is cancelled is also discharged.
(3) A cancellation made unintentionally or under a mistake or without the authority of the holder, is inoperative: Provided
GOVERNMENT GAZEITE EXTRAORDINARY, 15m MAY,1964 39
that if a bill or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally or under a mistake or without authority.
62. (1) If a bill or an acceptance is materially altered, the Effect ~f liability ~fall parties w_ho were parties .to the bill at the date ~~~;~~~ttance. of alteration and who d1d not assent to tt, must be regarded as · if the alteration had not been made, but any party who has himself made, authorized or assented to the alteration, and all subsequent indorsers are liable on the bill as altered.
(2) For the purposes of sub·section (1) material alterations include any alteration of the date, the sum payable, the time of payment and the place of payment, and, if a bill has been accepted generally, the addition of a place of payment without the acceptor's assent.
AccEPTANCE AND PAYMENT FOR HoNouR, AND PAYMENT BY REfEREE IN CASE OF NEED.
63. (1) If a bill has been protested for dishonour by non· Acceptance for acceptance or prot~sted for better secm:ity, and is not overd?e, ~~gt~~ ~':fJ0 any person, not betng a party already bable thereon, may With maturity of the consent of the holder intervene and accept the bill, supra certain bills so protest, for the honour of any party liable thereon, or for the accepted. honour of the person for whose account the bill is drawn.
(2) A bill may be accepted for honour for part only· of the sum for which it is drawn.
(3) An acceptance for honour, supra protest, in order to be valid must-
(a) be written on the bill and indicate that it is an accep. tance for honour;
(b) be signed by the acceptor for honour.
(4) If an acceptance for honour does not expressly state for whose honour it is made, it is deemed to be an acceptance for the honour of the drawer.
(5) If a bill payable after sight is accepted for honour, its maturity is calculated from the date of noting for non·acceptance, and not from the date of acceptance for honour.
64. (1) The acceptor for honour of a bill by accepting it, Liability of engages that he will, on due presentment, pay the bill according ~cceptor for to the tenor of his acceptance, if it is not paid by the drawee, onour. provided it has been duly presented for payment and protested for non·payment, and he receives notice of these facts. ·
(2) The acceptor for honour is liable to the holder and to all parties to the bill subsequent to the party for whose honour he has accepted.
65. (1) If a dishonoured bill bas been accepted for honour, Presentment to supra protest, or contains a reference in case of need, it must be ahcceptor fodr
d ,. b ,. . . d ,. onour an proteste 10r non·payment e1ore It IS presente 10r payment referee in case to the acceptor for honour or the referee in case of need. of need.
(2) If the address of the acceptor for honour is in the same place where the bill is protested for non-payment, the bill must be presented to him not later than on the business day next after its maturity, and if the address of the acceptor for honour is in some place other than the place where it is protested for non·payment, the bill must be posted to him or forwarded for presentment to him not later than on the business day next after its maturity.
(3) Delay in presenting or failure to present a bill for payment contemplated in sub-section (1) is excused by any circumstances which, in any other case, would excuse delay in presenting, or failure to present, a bill for payment.
( 4) If a bill of exchange is dishonoured by the acceptor for honour, it must be protested for non-payment by him.
66. (1) If a bill has been protested for non·payment, any Payment for person, not being a party already liable thereon, may intervene ~~~~~supra and pay it supra protest for the honour of any party liable · thereon, or for the honour of the person for whose account the bill is drawn.
GOVERNMENT GAZETTE EXTRAORDINARY, 15TH MAY, 1964 41
(2) If two or more persons offer to pay a bill for the honour of different parties, the person whose payment will discharge most parties to the bill shall have preference.
(3) Payment for honour supra protest, in order to operate as such and not as a mere voluntary payment, must be attested by a notarial act of honour, which may be appended to the protest or form an extension of it.
(4) The notarial act of honour referred to in sub-section (3) must be founded on a declaration made by the payer for honour or a person authorized by him to do so, declaring his intention to pay the bill for honour, and for whose honour·he pays.
(5) If a bill has been paid for honour, all parties subsequent to the party for whose honour it is paid are discharged, but the payer for honour is substituted for, and succeeds to both the rights and duties of, the holder as regards the party for whose honour he pays, and all parties liable to that party.
(6) (a) The payer for honour, on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonour, is entitled to receive both the bill itself and the protest.
(b) If the holder does not, on demand, deliver them up, he shall be liable to the payer for honour in damages.
(7) If the holder of a bill refuses to receive payment for honour supra protest, he shall lose his right of recourse against every party who would have been discharged by such payment.
lOST INSTRUl\IENTS.
67. (1) If a bill is lost before it is overdue, the person who ~ol_de(s rights was the holder of it may request the drawer to give him another: 1f hlllls lost. bill of the same tenor, giving adequate security to the drawer, if required,. to indemnify him against all persons whatever in case the bill alleged to have been lost is found again.
(2) If the drawer on such request refuses to give such bill he may be compelled to do so.
68. In any action or proceeding upon a bill, other than a A;ct'"" '"'nr. 1"d proceeding for provisional sentence, the court may order that bdl the loss or non-production of the instrument shall not be set up by way of defence, provided an indemnity be given to the satisfaction of the court against the claims of any other person upon the instrument in question.
BILL lN A SET.
' 69. (I) If a bill is drawn m a set, each part of the set being Rules as to a
numbered and containing a reference to the other parts, the bill in a sd. whole of the parts constitutes one bill. ·-
(2) If a holder of a set indorses two or more parts to different persons, he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if the said parts were separate bills.
(3) If two or more parts of a sei are negotiated to different holders in due course, the holder whose title first accrues is as between such holders deemed to be the true owner of the bill: Provided that nothing in this sub-section contained shall affect the rights of a person who jn due course accepts or pays the part first presented to him. .
(4) (a) The acceptance of a bill drawn in a set may be _ written on any part thereof, and it must be written
on one such part only. ·
(b) If the drawee accepts more than one part, and such accepted parts get into the hands of different holders in due course, he is liable on every such part as if it were a separate bill.
(5) If the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding and in the hands of a holder in due course, he is liable to the holder thereof.
(6) Subject to the provisions of sub-sections (2), (3), (4) and (5), tf any one part of a bill drawn in a set is discharged by payment or otherwise. the whole bill is discharged.
GOVERNMENTGAZE'ITE EXTRAORDINARY, 15m MAY,l964 43
CONFLICT OF LAWS.
70. If a bill drawn in one country js negotiated, accepted Rule~ if laws or payable in another, the rights, duties and liabilities of the confhct. · parties thereto are determined as follows, namely-
(a) the validity of the bill as regards requisites in form is determined by the law of the place of issue, and the validity, as regards requisites in form, of every supervening contract, such as acceptance, indorsement or acceptance for honour supra protest. is determined by the law of the place where such contract was made, but-
(i) a bi1l issued outside the Republic is not invalid by reason only that it is not stamped in accor- dance with the law of the place of issue; and
(ii) a bill issued outside the Republic which conforms, as regards requisites in form, to the law of the Republic, may for purposes of enforcing payment thereof be treated as valid as between all persons who negotiate, hold or become parties to it in the Republic;
(b subject to the provisions of this Act; the interpre- tation of the contract of the drawer, indorser, acceptor, or acceptor for honour supra protest, of a bill is determined by the law of the place where such contract is made: Provided that if a bill drawn and payable in the Republic is indorsed elsewhere. the indorsement shall as regards the payer be inter- preted according to the law of the Republic;·
(c) the duties of the holder with respect to presentment for acceptance or payment, and the necessity for, or sufficiency of, a protest or notice of dishonour or otherwise, are determined by the law of the place where the act is done or the bill is dishonoured;
(d) if a bill is drawn outside but payable in the Republic, and the sum payable is not expressed in currency of the Republic, the amount shall, in the absence of an express stipulation to the contrary, be calculated according to the rate of exchange for sight drafts at the place of payment on the day the bill is payable;
(e) if a bill is drawn in one country and is payable in another the due date thereof is determined according to the law of the place where it is payable.
CHAPTER II.
CHEQUES~GENERALLY.
71. Except as otherwise provided in this chapter, the pro- Applicability to visions of this Act applicable to a bill payable on demand ~~~irisp~f,. apply to a cheque. visions relating
to certain other bills. '
72. (1) Subject to the provisions of this Act- Presentment of cheque for
(a) if a cheque is not presented for payment within a payme reasonable time, within the meaning of sub-section (2), of its issue, and the drawer or the person on whose account it is drawn had the right, at the time at which such cheque should have been presented for payment, as between himself and the banker, to have the cheque paid, and suffers actual damage through the delay, be is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount than he would have been had such cheque been paid;
(b) the holder of a cheque as to which such drawer or person is so discharged shall be a creditor, in lieu of such drawer or person, of such banker to the extent of such discharge, and be entitled to recover the amount from him.
(2) In detemUng what is a reasonable time for the purpose of paragraph (a) of sub-section (1), regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case.
GOVERNMENT GAZETTE EXTRAORDINARY, 15TH MAY, 1964 45
73. The duty and authority of a banker to pay a cheque Revocation of drawn on him by his customer are determined by- bankth er~ts
(a) countermand of payment; (b) recdpt of notice of the customer's death; (c) receipt of notice of the customer having become
insolvent.
au on y.
74. The provisions of paragraph (b) of sub-section {1) of ~nsequence$ cf section forty-nine shalt not apply in respect of the drawer or the fa~ure to pro- payee of a cheque. es ·
CROSSED CHEQUES.
75. (1) If a cheque bears across its face an addition of- Gen~ral and. · . • • spec1al crossmgs en
(a) the words "and Company", or any abbreviation cheques. thereof, between two parallel transverse lines, either with or without the words "not negotiable"; or
(b) two parallel transverse lines simply, either with or without the words "not negotiable",
that addition constitutes a crossing and the cheque is crossed generally.
(2) If a cheque bears across its face an addition of the name of a banker, either with or without the words "not negotiable'', that addition constitutes a crossing and the cheque is crossed specially and to that banker.
76. (1) A cheque may be crossed generally or specially by Crossings by the drawer. draw~r, or
(2) If a cheque is uncrossed· the holder may cross it generally after JSsue. or specially.
(3) If a cheque is crossed generally the bolder may cross it specially.
(4) If a cheque is crossed generally or specially, the holder may add the words "not negotiable".
(5) If a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker for collec-· tion.
(6) If an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, he may cross it specially to himself.
77. A crossing authorized by this Act is a material part of Cross~g a the cheque, and it shall not be lawful for any person to obliterate ~a~h~~l ~art or, except as authorized by this Act, to add to or alter such a u · crossing.
78. (1) If a cheque is crossed generally, the banker on whom Duties of it is drawn shall not pay it to any person other than a banker. bankers as to
(2) If a cheque is crossed specially, the banker on whom it crossed cheques. is drawn shall not pay it to any person other than the banker to whom it is crossed, or the latter's agent for collection, if he is a banker.
(3) If a cheque is crossed specially to more than one banker, except when crossed to two bankers of whom the one is an agent for collection of the other, the banker on whom it is drawn shall refuse payment thereof.
( 4) If the banker on whom a cheque is drawn- ( a) pays such cheque if it is crossed as is contemplated in
sub-section (3); (b) pays such cheque to any person other than a banker if
it is crossed generally; or (c) pays such cheque, if it is crossed specially, to any
person other than the banker to whom it is crossed or the latter's agent for collection, if he is a banker,
he is liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid! Provided that if a cheque is presented for payment and it does not, at the time of presentment, appear to be crossed or to have had a crossing which bas been obliterated, or to have a crossing which has been added to or altered, otherwise than as authorized by this Act, the banker paying the cheque in good faith and without negligence shall not be responsible or incur any liability, nor shall the payment be questioned, by reason of the cheque having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise than as authorized by this Act, and of payment having been made to a person other than a banker or the banker to whom the cheque is or was crossed, or· the latter's agent for collection who is a banker, as the case may be.
GOVERNMENT GAZETIE EXTRAORDINARY, 15TH MAY, 1964 47
79. If the banker on whom a crossed cheque is drawn, in Protection to good faith and without negligence pays it, if crossed generally, ~anker ahd to a banker, and, if crossed specially, to the banker to whom it c~~~~~ ~ c~~ssed is crossed, or the latter's agent for collection, who is a banker, • the banker paying the cheque, and, if the cheque has come into the hands of the payee, the drawer shall respectively be entitled to the same rights and be placed in the same position as if payment of the cheque had been made to the true owner thereof.
80. If a person takes a crossed cheque which bears on it Effect o~ ~ossing the words "not negotiable" he shall not have and shall not and addttion of ' • words "not ' be capable of giving a better title to the cheque than that which negotiable'' 0~ the person from whom he took it had. rights of holr .. r.
81. (1) If a cheque was stolen or lost while it was crossed as True owner authorized by this Act and while it bore on it the words "not of stolen or
· bl " d · "d b h b k h · lost crossed negot1a e , an It was pai y t e an er upon w om It was cheque marked drawn, under circumstances which do not render such banker "not negotiable" liable in terms of this Act to the true owner of the cheque for entitle~ to com- any loss he may sustain owing to the cheque having been paid, pe~~t1on ~rom the true owner shall, if he suffered any loss as a result of the ~~~~~ 51
theft or loss of the cheque, be entitled to recover from any · person who was a possessor thereof after the theft or loss, and either gave a consideration therefor Oli took it as a donee, an amount equal to the true owner's said loss or the amount of . the cheque, whichever is the lesser.
· (2) If a person has after the theft or loss paid any such cheque into his account with a banker after having paid, or for the purpose of paying,. the amount of the cheque or part thereof to the person from whom he received the cheque, or, on his direction, to any other person, he· shall, for the purposes of sub-section (1), be deemed to have been a possessor of the cheque and to have given a consideration therefor: Provided that the foregoing provisions of this sub-section shall not apply to a collecting banker employing another banker as his agent for the collection of any such cheque.
(3) If a person took any such cheque into his possession or custody after the theft or loss, and fails to furnish the true owner or any person who has in terms of sub-section (7) the rights of a true owner, at his request, with any information at his disposal in connection with the cheque, he shall for the purposes of sub-section (1) be deemed to have been a possessor of the cheque and either to have given a consideration therefor or to have taken it as a donee.
(4) Every possessor of any such cheque shall, for the purposes of this section, and until the contrary is proved, be deemed either to have given a consideration therefor or to have taken it as a donee. ·
(5) For the purposes of sub-section (1), a banker who receives payment of any such cheque for a customer shall, subject to the provisions of sub-section (3), not be regarded as having given a consideration therefor, merely because he has in his own books credited his customer's account with the amount of the cheque before receiving payment thereof, or because any such payment is applied towards the reduction or settlement of any debt owed l;>y the customer to the banker. . (6) If in. any action under tllis section the defendant proves
that when he became the possessor of the cheque, it did not appear to be crossed or to have had a crossing which had been obliterated, and to bear on it the words "not negotiable", or to have borne on it any words. which might have been the words "not negotiable" and had been obliterated, he shall, subject to the provisions of sub-section (3), not be held liable under this section.
(7) (a) A person who has discharged his liability under sub-section (I) and who took the cheque in good faith and without notice of any defect in the title of the transferor, shall as against any prior possessor of the cheque, who became a possessor thereof after the theft or loss and either gave a consideration there· for or took it as a donee, have the rights conferred upon a true owner by sub-section (1).
(b) The provisions of paragraph (a) shall mutatis mutandis apply to a person who has discharged his liability under the said paragraph or under the said paragraph as applied by this paragraph.
GOVERNMENT GAZETTE EXTRAORDINARY, 15TH MAY, 1964 · 49
(8) For the purposes of this section the giving of a con- sideration includes the receiving of any such cheque in re- duction or settlement of any debt or liability.
82. Sections seventy-five to and including eighty-one shall Ap~lication of also apply to any document issued by a customer of any banker 8f~~~ ~5. to and intended to enable any person to obtain payment on docurne~t~~ther' demand of the sum mentioned in such document from such than cheques. banker (or from any banker, if the document was issued on · behalf of the State), and shall so apply as if the said document were a cheque, and the said sections shall . mutatis mutandis also apply to any document which-
(a) was issued on behalf of the State; (b) is drawn upon or addressed to a servant of the State
(hereafter in this section called the drawee); and (c) is intended to enable any person to obtain payment
on demand of the sum mentioned in such document from the drawee or from or through a banker, .
as if the said document were a cheque and as if the drawee were a banker and the State his customer: Provided that nothing in this section contained shall render any such document a negotiable instrument.
UNINDORSED OR IRREGULARLY INDORSED INSTRUMENTS.
83. (1) If a banker in good faith and in the ordinary course Effect of of business credits the account of a customer of his with or payment to or Pays to another banker the amount of- . crediting of accounts by
· 1a) any cheque drawn on him· bankers of \' ' amounts of (b) any other document issued by a customer of his ~nindorsed or
and intended to enable any person to obtain payment !rrdeguladrly d d f h . d . h d m orse on eman o t e sum ment10ne m sue ocument cheques and
from him (or from any banker, if the document was certain other issued on behalf of the State); or documents.
(c) a draft payable on demand drawn by such firstmen- tioned banker upon· himself, or upon his agent who is a banker, whether payable at the head office or some other office of his bank or of such agent,
he shall not incur any liability by reason only of the absence of, or irregularity in, indorsement thereof, and such cheque, document or draft shall be discharged by such crediting of the account in question or by such payment.
(2) The provisions of sub-section (1) shall mutatis mutandis also apply to any document which-
(a) was issued on behalf of the State; (b) is drawn upon or addressed to a servant of the State
(hereafter in this section called the drawee); and (c) is intended to enable any person to obtain payment
on demand of the sum mentioned in such document . from the drawee or from or through a banker,
as if the said document were a cheque and as if the drawee were a banker and the State his customer.
84. If a cheque, or draft or other document referred to in rughts of section eighty-three, which is payable to order, is delivered ba':lkers ifd ! by the holder thereof to a banker for collection, and such ~mdf::t or cheque, draft or document is not indorsed or was irregularly in3~ed Y ! indorsed by such holder, such banker shall have such rights, cheques or certain if any, as he would have had if, upon such delivery, the holder otller